Banker Friend writes in:
I have been working this week on a credit limit for a customer of ours who export most of their production to Africa where its used as raw material by local FMCG industries. The application will run into trouble with Credit Acceptance because the customer’s repayment record has not been faultless.
So probe. Why hasn’t his account been faultless? Because he was late on an export bill payment.
Why was he late paying the bill? Because his export customer, a distributor in Ghana, didn’t have the cash to pay the full amount, and delayed paying our customer.
Why didn’t the customer’s customer have the cash? Because his customers, the manufacturers in Ghana had temporarily stopped manufacturing and weren’t buying raw materials any more.
And why is that? Because there have been severe power cuts in Ghana and industries have had to cease production.
Not that I like having to answer even more queries from credit, but I find the fact that a power shortage in Ghana creates extra work for me in India to be weirdly delightful.
It reminds us (me and Banker Friend) of one of our favourite essays, Leonard Read’s “I, Pencil.” If you haven’t read it, please do, it is magnificent, and illustrates the power of freedom better than whole books on the subject.